Harbor Overseas Fund Institutional Class (HAOSX)

Investment Strategy

Acadian believes that markets are inefficient, in part, because of common mistakes in investor behavior and structural features of markets. It further believes in applying fundamental insights in a systematic, multi-faceted, and adaptable fashion to find attractive investment opportunities and to attempt to exploit mispricings.

Acadian systematically evaluates individual stocks based on their value, quality, growth, and technical attributes. It is a fundamental belief of the firm that combining factors, rather than relying on one or two, will help lead to more consistent performance over time.

 

Acadian's process is systematic, objective, and consistent.

Acadian's investment process:  Investment universe to stock forecast to portfolio constructions to trading.


Acadian starts with a broad universe. It assigns stocks into relevant peer groups and scores them on over 70 attributes described by themes in the picture below—value, growth, quality, and technical. These peer groups are based on region and industry classifications. For example, European banks are compared against one another. Factor weightings are the same for the various European banks but will vary for different peer groups based on identifiable common attributes. As shown in the graphic below, Acadian builds forecasts for each stock based on its individual relevant factor score. Acadian's stock selection framework also includes top-down views. The bottom-up and top-down components are combined into a total forecast for each stock.

Bottom-up factors related to Value, Growth, Quality and Technical aspects, along with Top Down evaluations across regions or segment, for example, are all scored and combined to develop an overall forecast for a given security.

Source: Acadian Asset Management LLC. 
The information provided is for illustrative purposes only based on proprietary models.  There can be no assurance that the forecasts will be achieved.

 

Total forecasts are the inputs for building portfolios. Acadian uses a portfolio optimization system, which incorporates the forecasts and mandate-specific constraints, to construct portfolios with the highest return forecast relative to benchmark risk, net of transaction costs. Particular emphasis is placed on estimated transaction costs and available liquidity, and stocks are only bought/added or discarded/ reduced if the cost of the buy and sell does not exceed the expected value-added to be gained.

Risk

The value of securities selected using quantitative analysis can react differently to issuer, political, market, and economic developments than the market as a whole or securities selected using only fundamental analysis. The factors used in quantitative analysis and the weight placed on those factors may not be predictive of a security's value. In addition, any model may contain flaws or the model may not perform as anticipated.

Investing in international and emerging markets poses special risks, including potentially greater price volatility due to social, political and economic factors, as well as currency exchange rate fluctuations. These risks are more severe for securities of issuers in emerging market regions.

Stock markets are volatile and equity values can decline significantly in response to adverse issuer, political, regulatory, market and economic conditions.